Nelsons & Sons v. Clovis Unified School Dist.
| Decision Date | 22 June 2001 |
| Citation | 108 Cal.Rptr.2d 715,90 Cal. App. 4th 64 |
| Court | California Court of Appeals Court of Appeals |
| Parties | (Cal.App. 5 Dist. 2001) LEWIS C. NELSON & SONS, INC. Plaintiff and Respondent, v. CLOVIS UNIFIED SCHOOL DISTRICT, Defendant and Appellant. F032493 & F033135 Filed |
O P I N I O N
APPEAL from a judgment of the Superior Court of Merced County. Michael S. Hider, Judge.
Bolling, Walter & Gawthrop, Marjorie E. Manning and Kevin W. Reager and Eldridge, Anderson & Shapazian and William D. Anderson for Defendant and Appellant.
McInerney & Dillon, Robert L. Leslie and Alexander Bannon for Plaintiff and Respondent.
CERTIFIED FOR PARTIAL PUBLICATION*
In the published portion of this opinion we hold that Civil Code section 3287, subdivision (b), applies to public entities.
In 1992, after a competitive bidding process, appellant Clovis Unified School District (District) awarded a 32 million dollar contract to respondent Lewis C. Nelson & Sons for the construction of Floyd Buchanan High School in Clovis. Building commenced in April 1992. As a result of poor weather in late 1992 and early 1993, the planned construction schedule was interrupted and it become clear that, without acceleration of the work, the school would not be ready for the beginning of the 1993-1994 school year. In May 1993, at the District's request, Nelson estimated it would cost approximately $350,000 to accelerate the project and complete it by September 1993. The District did not have the funds to cover these estimated increased costs and asked that Nelson focus on completing the academic buildings and making them ready for use by early September 1993.
On August 1993, the District gave Nelson an order to accelerate, pursuant to Article V of the contract, so as to complete certain buildings by the beginning of the school year; the District agreed to pay Nelson the additional costs resulting from the acceleration order. The identified buildings were completed by the date specified, at increased expense to Nelson. The remainder of the project was completed and occupied by April 1994. Nelson remained on the site doing punch list work for several additional months.
A dispute arose between Nelson and the District concerning the costs attributable to the acceleration. Payment from the District to Nelson was slow, and the District rejected some of Nelson's claims altogether. In the meantime, several of Nelson's subcontractors, which had also incurred additional costs as a result of the acceleration order, were unpaid. One of these subcontractors, TSV Painting, ultimately sued Nelson for uncompensated acceleration costs. Another subcontractor filed bankruptcy.
On July 21, 1995, Nelson filed with the District a "claim for damages" pursuant to the Government Claims Act ("Claims Act").2 The claim read in pertinent part as follows:
The claim generally identified the damage incurred by Nelson as "costs and damages and to be sued by TSV Painting Inc."
On August 11, 1995, the District asked Nelson for clarification of its claim; the District expressed uncertainty about whether the claim included anything other than the TSV lawsuit. On September 7, 1995, Nelson responded with the statement of its position that, if the District's August 11 letter was intended to be a notice of insufficiency pursuant to Government Code section 910.8,3 it was untimely and that, because the statutory time limit of 45 days had elapsed, the claim had been denied by operation of law. Nelson also informed the District that Nelson had filed a lawsuit in Fresno County Superior Court for damages against the District and represented that service of process would follow.
Nelson's action was filed on September 7, 1995. The original complaint contained only an indemnity cause of action. A first amended complaint was filed on September 25, 1995; it alleged two separate causes of action, one for breach of contract and one for indemnity.4. The breach of contract count alleged that the District had defaulted on its obligations under its contract with Nelson by the following acts:
1) making numerous design changes during construction;
2) failing to respond to Nelson's requests for information;
3) delaying approved change orders;
4) requiring work not specified in the contract;
5) refusing to grant time extensions for delays caused by the District;
6) failing to compensate Nelson for the added costs of the District's breaches;
7) failing to make timely payments or pay interest on delayed payments;
8) failing to resolve the claims submitted by Nelson; and
9) requiring Nelson to finance the project.
The indemnity count alleged that Nelson had been sued by TSV for nonpayment of added costs which resulted from the District's deficient coordination of the work and from the District's acceleration order.
The District filed its answer on January 19, 1996, in which it alleged, as an affirmative defense, Nelson's noncompliance with the Claims Act. Specifically, the District asserted that Nelson's claim was untimely and insufficient, and that any ground of recovery set forth in the complaint which exceeded the scope of Nelson's July 21, 1995, government claim was barred.
Trial commenced on September 17, 1998. Prior to opening statements, the District filed a motion for a separate trial of its special defenses under the Claims Act or, in the alternative, for an order in limine excluding all evidence relating to the grounds for recovery not disclosed in Nelson's governmental claim. After argument, the trial court denied the District's motion for a separate trial. The court did not rule then or at any later time on the District's alternate motion for a limiting evidentiary order, and the evidence covered by the District's motion was admitted during trial without objection.
Nelson, on its part, filed a motion in limine to exclude all evidence that its governmental claim was insufficient or untimely, on the ground that the District's failure to provide Nelson with a notice of insufficiency under section 911 waived these defenses. The trial court granted Nelson's motion in part, directing that all evidence concerning the alleged insufficiency of the claim would not be admitted. The court did not rule, however, on the admissibility of evidence relating to the timeliness of Nelson's claim.
In addition to its pretrial motions, the District brought two separate motions for directed verdict. The first was an unsuccessful oral motion made after Nelson rested its case. The District argued the court was obligated to direct a verdict in its favor as to all grounds of recovery which exceeded the scope of Nelson's July 21, 1995, governmental claim. Nelson responded with the assertion that the District had failed to prove its compliance with section 53051. The second was a written motion filed just prior to submission of the case to the jury. The District argued that Nelson's governmental claim was untimely. This motion was later withdrawn by the District; no ruling on it appears in the record.
At the close of evidence both parties made motions to conform their respective pleadings to the proofs, which the trial court granted in each case.
The jury was instructed that Nelson sought damages against the District for several breaches of contract by the District, as follows:
(1) the District failed to make timely payments as required by the contract;
(2) the District's plans and specifications were not full, complete and accurate and, as a result, Nelson was compelled to perform extra electrical work;
(3) the District failed to fully compensate Nelson for overhead costs and a reasonable profit with respect to the costs of acceleration resulting from the District's acceleration order; and
(4) the District prevented and hindered Nelson from performing under the contract by occupying buildings before construction was complete.
In addition, the jury was directed to decide Nelson's cause of action for indemnity with respect to the TSV lawsuit and to decide the timeliness of Nelson's governmental claim. As to the latter issue, the factual questions posed to the jury were (1) whether the project had been substantially completed before April 15, 1994, and (2) whether the District had denied, before July 20, 1994, Nelson's demand for acceleration overhead and profit.
After 19 days of trial, the jury returned a verdict in favor of Nelson on both causes of action, in the amount of $1,026,723.91. The jury found, in a special interrogatory, that no damages were refused because Nelson's governmental claim was late.
Nelson successfully moved for an award of prejudgment interest on the verdict, in the amount of $323,683.35. The trial court found that Civil Code section 3287, subsection (b), allowed the assessment of prejudgment interest on unliquidated claims against public entities.
On October 26, 1998, the District paid Nelson $1,026,723.91 in partial satisfaction of the judgment. Judgment was entered Nunc Pro Tunc November 19, 1998. Notice of Entry of Judgment was filed on...
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